Question: Following is information for the Tri-County Carting Corporation for fiscal years 20-A and 20-B:
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Tri-County Carting Corporation
Comparative Balance Sheet
December 31, 20-B and 20-A
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Assets
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20-B
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20-A
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Inc./Dec.
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Current assets:
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Cash
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$ 58,240
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$ 58,300
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$ (60)
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Government notes
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1,650
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5,500
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(3,850)
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Accrued interest receivable
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82
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192
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(110)
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Accounts receivable (net)
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154,245
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139,150
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15,095
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Merchandise inventory
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177,564
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185,658
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(8,094)
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Supplies and prepayments
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11,041
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7,524
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3,517
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Total current assets
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$402,822
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$396,324
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$ 6,498
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Property, plant, and equipment:
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Store equipment
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$132,000
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$106,700
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$25,300
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Less accumulated depreciation-
store equipment
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(49,500)
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(38,500)
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(11,000)
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Delivery equipment
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123,200
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88,000
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35,200
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Less accumulated depreciation- delivery
equipment
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(34,375)
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(22,000)
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(12,375)
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Office equipment
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105,050
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93,472
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11,578
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Less accumulated depreciation-
office equipment
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(22,000)
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(16,775)
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(5,225)
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Total property, plant, and equipment
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$254,375
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$210,897
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$43,478
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Total assets
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$657,197
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$607,221
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$49,976
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Liabilities
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Current liabilities:
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Notes payable
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$ 27,720
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$ 32,450
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$ (4,730)
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Accounts payable
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89,416
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128,550
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(39,134)
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Accrued and withheld payroll taxes
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2,722
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4,180
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(1,458)
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Accrued interest payable
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231
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220
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11
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Total liabilities
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$120,089
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$165,400
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$(45,311)
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Stockholders' Equity
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Common stock (100,000 shares,
$10 par)
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$275,000
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$269,500
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$ 5,500
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Paid-in capital in excess of par-
common stock
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110,000
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107,250
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2,750
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Retained earnings
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152,108
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65,071
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87,037
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Total stockholders' equity
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$537,108
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$441,821
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$ 95,287
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Total liabilities and stockholders'
equity
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$657,197
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$607,221
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$ 49,976
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Tri-County Carting Corporation
Income Statement
For the Year Ended December 31, 20-B
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Net sales
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$1,265,275
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Cost of goods sold
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742,775
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Gross profit
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$ 522,500
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Operating expenses
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398,063
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Operating income
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$ 124,437
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Other revenues and expenses:
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Interest revenue
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$ 550
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Interest expense
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(2,750)
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(2,200)
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Net income
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$ 122,237
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Tri-County Carting Corporation
Statement of Retained Earnings
For the Year Ended December 31, 20-B
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Retained earnings, January 1
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$ 65,071
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Net income
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$122,237
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Less dividends
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(35,200)
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Net increase in retained earnings
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87,037
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Retained earnings, December 31
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$152,108
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Required:
1. Prepare a schedule for the calculation of cash generated from operating activities for the year ended December 31, 20-B.
2. Prepare a statement of cash flow for the year ended December 31, 20-B.